16 CFR § 240.4 - Definition of customer.

---
identifier: "/us/cfr/t16/s240.4"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "16 CFR § 240.4 - Definition of customer."
title_number: 16
title_name: "Commercial Practices"
section_number: "240.4"
section_name: "Definition of customer."
chapter_name: "FEDERAL TRADE COMMISSION"
subchapter_number: "B"
subchapter_name: "GUIDES AND TRADE PRACTICE RULES"
part_number: "240"
part_name: "GUIDES FOR ADVERTISING ALLOWANCES AND OTHER MERCHANDISING PAYMENTS AND SERVICES"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "Secs. 5, 6, 38 Stat. 719, as amended, 721; 15 U.S.C. 45, 46; 49 Stat. 1526; 15 U.S.C. 13, as amended."
regulatory_source: "79 FR 58252, Sept. 29, 2014, unless otherwise noted."
cfr_part: "240"
---


# 240.4 Definition of customer.

A *customer* is any person who buys for resale directly from the seller, or the seller's agent or broker. In addition, a “customer” is any buyer of the seller's product for resale who purchases from or through a wholesaler or other intermediate reseller. The word “customer” which is used in section 2(d) of the Act includes “purchaser” which is used in section 2(e).

Note: There may be some exceptions to this general definition of “customer.” For example, the purchaser of distress merchandise would not be considered a “customer” simply on the basis of such purchase. Similarly, a retailer purchasing solely from other retailers, or making sporadic purchases from the seller or one that does not regularly sell the seller's product, or that is a type of retail outlet not usually selling such products (e.g., a hardware store stocking a few isolated food items) will not be considered a “customer” of the seller unless the seller has been put on notice that such retailer is selling its product.